* UK consumer morale dips in July, albeit from high level
* House prices stagnated this month, says Nationwide
* BoE official says "edge coming off" housing market
* GRAPHIC: Consumer confidence r.reuters.com/pyv65s
* GRAPHIC: House prices r.reuters.com/jad24s
By Andy Bruce and Tess Little
LONDON, July 31 (Reuters) - British consumer morale dipped for the first time in six months in July and house prices stagnated, adding to signs that Britain's rapid economic recovery is cooling slightly.
The consumer confidence index produced by market research company GfK unexpectedly fell although it was still close to a nearly 10-year high.
House price growth figures from mortgage lender Nationwide were their weakest in more than a year.
The Bank of England and private economists expect Britain's economy to slow slightly in the second half of 2014, although it is still set to outpace all of its major European peers, raising questions about when interest rates will start to rise.
Sterling fell after the data and was on track to post its biggest monthly loss against the dollar in more than a year.
"With interest rate increases on the cards, and maybe a little bit of a slowing in growth, it's not a massive surprise (that consumer confidence dipped)," said Brian Hilliard, chief UK economist at Societe Generale. "But consumer confidence is at very high levels. This is just reminding us that it's around peak levels rather than it being weak."
The BoE is expected to leave interest rates on hold at a record low 0.5 percent when it meets next week.
"When you look at the data, the momentum in the economy is strong enough to continue to expect the (BoE) to gear up for tightening in the next few months," said Sam Hill, senior UK economist at RBC in London.
Economists polled by Reuters expect the first increase in interest rates to come in the first quarter of 2015 although markets are pricing in the chance of a hike in late 2014.
Britain's economy finally surpassed its pre-crisis peak of six years ago in the April-June period. Its resurgence has been driven mainly by consumers and the upturn in the housing market.
BoE Deputy Governor Ben Broadbent said in an interview with Bloomberg that the "edge was coming off" the housing market.
GfK NOP's consumer confidence index fell to -2 in July from 1 in June, the first positive reading in the survey in nearly 10 years. Economists in a Reuters poll had expected a rise to 2.
"The almost relentless rise of the last six months couldn't continue indefinitely, and the government will be hoping this is just a temporary setback rather than the forerunner of a wider decline in confidence," said Nick Moon, managing director of GfK Social Research.
Britain holds a national election in May 2015.
Mortgage lender Nationwide said the slowdown in house prices in July might also prove to be a pause after the introduction of tougher checks on mortgage borrowing in April.
House prices gained 0.1 percent month-on-month, the slowest pace since April 2013 and down from a jump of 1.0 percent in June. Economists had expected a rise of 0.5 percent.
The survey is the latest to suggest strong house price growth has started to ease.
"At least part of the slowdown in activity relates to the introduction of Mortgage Market Review measures," said Nationwide chief economist Robert Gardner, referring to the tougher checks on mortgage affordability.
A rebound in mortgage approvals in June - the first rise in five months - suggested the slowdown was temporary, he said. (Writing by Andy Bruce; Editing by Catherine Evans)